Some US voters to decide on 5% ganja tax

Fairbanks North Star Borough officials in the United States have agreed to put a marijuana sales-tax proposal before voters this fall.

The Borough Assembly approved the ballot question on Thursday that would implement a five per cent retail tax on pot sales. If voters approve, the tax would go into effect on January 1, 2017 and the borough could later increase the tax to six per cent, the Fairbanks Daily News-Miner reported.

The cities of Fairbanks and North Pole already have implemented a five per cent marijuana tax, and the borough is required to collect the tax on behalf of the cities.

Representatives from the marijuana industry say a lower tax will keep Fairbanks competitive, increasing pot business and its ability to provide more tax revenue.

"We want to be able to provide our product at as low a cost as possible," said Frank Berardi, the chairman of the Coalition for Responsible Cannabis Legislation, who testified before the Assembly on Thursday.

Berardi said he thinks the five per cent tax is reasonable, because it's the same tax placed on alcohol sales. The borough collects about $1 million each year from the five per cent alcohol tax, according to budget records.

Borough Mayor Karl Kassel said the tax proposal could require some changes at the Treasury and Budget Office, as collecting the cash from pot businesses would be novel for the borough.

"We may need to modify the building a little bit, and we've got to start on that soon if we are going to do it," Kassel said.

The city of Fairbanks' pot tax was approved last fall by a wide margin. In North Pole, the marijuana tax was authorized by the city council and applied to both retail and wholesale transactions.